India is among the largest democracies in the world, and it is also the tenth largest economy of the world. India also has the honor of being the third largest economy of Asia, and part of the developing world. It also occupies a position among BRICS. All of this makes India a tempting opportunity for investors. Many companies should invest in India specially the health care and health equipment manufacturer. This report is going to discuss the feasibility of what type of Healthcare firm should enter India. What kind of product and market offerings should the company provide, and how should it enter India.
The reason for India is an opportunity for the investors is because of its largest market size. India is home to more than $1 billion people (worldometers.info,2014). This large market size attracts a lot of companies. India has also a growing GDP, which reached high growth rate of 6.1 percent in the year 2014. It also has a growing per capital income and disposable income, which means that people will be willing to make more purchases as their income is rising. Healthcare is a commodity with inelastic demand, and hence it can be a very profitable business if it is positioned well, and provides good quality products at reasonable cost. With this aim in mind, the healthcare equipment technology company will enter India (US Commercial Services, 2010)
According to (Gawalani, 2014), cancer is growing disease in India. Every one person in India dies from cancer in 10 reported deaths. This is disturbing news. Since, the company that is entering India is a healthcare equipment company it should focus on bringing the healthcare equipment related to cancer. Not only will it serve the local population and save it from this disease, but this equipment will be very viable commercially for the company also. The company should market the cancer related machinery and products and should hold programmes relating to cancer awareness and early detection.
The total size of India’s medical equipment industry is $2.5 billion. The market size for cancer’s medical spending is $250 million. This is a huge market and by entering the market, the company is going to make a lot of money, and at the same time it is going to address a growing concern in the country. It will try to stop cancer from spreading further. It can held PR campaigns and seminars on early detection of cancer and health awareness programmes for cancer patients. This will build good rapport of the company with the masses, and at the same time it will be a good marketing strategy to promote the company’s products (Datta, 2014). Although, the government is currently not actively involved in the sector, but competition is rising as local manufacturing of medical equipment is increasing, and firms from different countries are investing in India’s tempting market.
The best thing for the company is tap the institutional, hospital and government sector. According to (Singh, 2007), this sector contributes to 35% of the total medical equipment purchases. This is the ideal market to target and a lot can be done increase the markets share in the market.
The company should introduce itself as a B2B (Business to Business) seller. It should only sell its products to hospitals, government and institutions like schools, colleges, universities and other organizations. Since, medical equipment is often expensive, there will be no market for B2C (Business-to-Consumer) products.
Currently the market of Cancer Equipment is dominated by goods that are exported from the US and other developing countries. Local production currently lags to a very small amount $78 million in total. This means that the ideal way to enter the market is through licensing the equipment to local manufacturer. This will involve transferring the modern technology to the manufacturer, who will produce the CD&TE equipment for the company. This will save a lot of customs and foreign duty and will allow the company to benefit from India’s cheap labor. This is the best option for the firm.
The equipment sold to the government will be through tendering. It will take time as there is a lot of bureaucracy involvement in the procurement. Therefore, the local partnership is required as it will meet all the tender laws and will meet the supply requirements to the government organizations. It will be difficult for the company to directly do this without the involvement of a local company. Hence, it is another reason why licensing and partnering with a local firm is important.
The goods produced should be marketed through PR campaigns in various hospitals and seminars arranged to promote this equipment. This will ensure that the company gets good relations with the NGOs and government officials in the health ministry. Also, the company should do a lot of profile building to improve the image of the company. This will increase the sales of the company, and it will be positioned as a brand providing high quality products.
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Gwalani, P. (2014). WHO report laments rise of cancer deaths in India - The Times of India. [online] The Times of India. Available at: http://timesofindia.indiatimes.com/city/nagpur/WHO-report-laments-rise-of-cancer-deaths-in-India/articleshow/45008620.cms [Accessed 9 Nov. 2014].
Singh, K. (2007). Articles about Medical Equipment - Economic Times. [online] Articles.economictimes.indiatimes.com. Available at: http://articles.economictimes.indiatimes.com/keyword/medical-equipment [Accessed 9 Nov. 2014].
US Commercial Services, (2010). Doing Business in India. [online] Available at: http://export.gov/india/build/groups/public/@eg_in/documents/webcontent/eg_in_062758.pdf [Accessed 9 Nov. 2014].
US Commercial Service, (2014). India's Health Indicators. [online] Available at: http://www.trade.gov/td/health/india_indicators05.pdf [Accessed 9 Nov. 2014].
Worldometers.info, (2014). Population of India (2014) - Worldometers. [online] Available at: http://www.worldometers.info/world-population/india-population/ [Accessed 9 Nov. 2014].